Woodford dumps Vodafone from £12bn High Income fund

Vodafone had been one of Woodford’s top holdings in the fund, accounting for 4.9% at the end of 2011. But he has now sold out of the stock due to reduced forecasts for revenue growth and concerns about its ability to maintain margins, according to The Telegraph.

Invesco product director Mitchell Fraser-Jones told the paper: ‘The fund has now completed the sale of its holding in Vodafone.

‘The company has reduced its forecasts for revenue growth on the back of ongoing weakness in its core southern European markets and the cash flow cover of the dividend has fallen to what we view as uncomfortably low levels,’ he added.

‘The company announced a share buy-back rather than the hoped for special dividend with its dividend from Verizon Wireless, while we also have reservations about the company’s ability to maintain its margin on data revenues.’

Woodford’s ability to get the big calls right on the fund, such as selling out of banks before the credit crisis, and avoiding the dotcom bubble, means the fund has enjoyed a stellar long-term performance record.

The fund marked its 25th anniversary this week, and would have returned 1,906% to investors who reinvested dividends since its launch.

Vodafone yesterday issued results reporting a 2.6% decline in group service revenues for the last three months of 2012, as it was hit hard by continued weakness in Europe. But its shares closed up 2.9p, or 1.7%, yesterday at 173.3p, with analysts Charles Stanley claiming the company remained a good buy.

In our five-minute video series introducing new funds, Citywire’s head of investment research Jonathan Miller speaks to Aberdeen’s senior investment specialist Scott Dakers about the strategy and asset allocation of Aberdeen’s Multi Asset fund range, launched on the back of the new pension freedoms.

Matching up a broad cross-section of society with financial advice that fills their needs poses a challenge, but research suggest financial advisers are prepared to step in to help those with smaller sums to invest.

We use cookies to give you the best experience on our website. You can continue to use the website and we'll assume that you are happy to receive cookies. If you would like to, you can find out more about cookies and managing them at any time here. This site is for Professional Investors only, please read our Risk Disclosure Notice for Citywire’s general investment warnings

We use cookies to improve your experience. By your continued use of this site you accept such use. To change your settings please see our policy.